1) A destination medical spa in Bali wants to add a new customer segment. Currently, the spa...
Question:
1) A destination medical spa in Bali wants to add a new customer segment. Currently, the spa charges $535 per spa package. The variable cost of each spa package is $365.15 If the spa decides to run a campaign to attract new customers by reducing the prices by 5% what will the new dollar margin be per each individual spa package?
2)A competitor of this medical spa also wants to attract this new segment. They are also concerned with maintaining their total margin. Right now, they attract 89 customers every week and charge $417 with variable costs of $281.48 per each spa package. They want to reduce price aggressively with a 10% discount. How many more spa packages will they need to sell in order to maintain the same margin amount?
3)The spa has decided to charge $404 per spa package and the variable cost has changed to $270.21 What is the total dollar margin they will make on 149 spa packages?
4)A company that makes flat screen televisions has decided to increase its price and believes that it can maintain the same total dollar margin even if they lose sales. Right now they sell 1,286 televisions a year at a price of $743. The variable cost for each TV is $479.35 The company has decided to increase price by 10% and the sales department wants to understand the revenue target. What is the total revenue that is needed at the new price in order to maintain the same total dollar margin?
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright